The move by the decentralised finance platform comes as its token’s value has plummeted by more than 90pc in less than three months.
Crypto lending platform Celsius Network has paused “all withdrawals, Swap and transfers between accounts” for its 1.7m customers, citing “extreme market conditions”.
“We are taking this necessary action for the benefit of our entire community in order to stabilise liquidity and operations while we take steps to preserve and protect assets,” the decentralised finance platform wrote in a blogpost today (13 June).
“Furthermore, customers will continue to accrue rewards during the pause in line with our commitment to our customers.”
Founded in 2017, Celsius functions in a similar way to a regular bank – except that its assets are based on the promise of ‘high-yield’ crypto instead of fiat money. According to its website, Celsius has processed more than $8.2bn in loans to date and holds nearly $12bn in assets as of 17 May 2022.
The company’s own crypto token, CEL, has been plummeting in value for a while now and took a big blow after this latest announcement.
It is trading at just below $0.20 at the time of writing, according to CoinMarketCap. That is a more than 90pc fall in value since April, when CEL was worth $3.
“We understand that this news is difficult, but we believe that our decision to pause withdrawals, Swap and transfers between accounts is the most responsible action we can take to protect our community,” Celsius went on.
“There is a lot of work ahead as we consider various options. This process will take time, and there may be delays.”
The move comes amid a general downturn in crypto assets such as bitcoin and Ethereum, which are now at their lowest values in more than a year.
While Celsius has given its customers no timeline for restarting services, it said it is prioritising stabilising liquidity and restoring transactions over its platform “as soon as possible”.
Financial regulators across the world are becoming increasingly vocal about the effects of the crypto downturn on the economy.
The Central Bank of Ireland warned Irish politicians recently that the “fast-evolving” world of crypto assets could soon threaten the wider economy due to its scale and increasing integration with the traditional financial system, according to The Business Post.
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